When you go to China – and find everything cheaper than in your home country, it usually means China has an undervalued currency.

Similarly, when you go abroad and find everything cheap, it means that your currency is overvalued. Like the Indian rupee till the 1990s.

Way back in the 1970s when Indian travelled with US$250-500 foreign travel allowance, everything abroad was cheap – and Indians returned with bags full of shopping – only to be ripped apart by the Customs.

Today this situation is limited to China, and maybe some parts of ASEAN. Mostly, Indians find the home markets cheaper.

This means Indian rupee is slightly overvalued /undervalued – depending on which currency you are comparing with.

But when a Chinese travels abroad, everything is cheaper at home – and abroad is expensive. This means an undervalued currency.

Till the 1990s India followed a over-valued rupee, which limited exports – but made imports cheaper. Between 1975-2000, India devalued its currency in stages to bring to near-free float. Now the overvaluation-undervaluation is marginal.

I do consider all of the ideas you have presented on your post. They are really convincing and will certainly work. Still, the posts are very brief for starters. May just you please lengthen them a bit from next time? Thanks for the post.